An improving customer traffic picture, along with solid gains in sales and average transactions, appears to be fueling retailers ability to keep prices up and limit promotional activity. According to the latest findings of the NRF Executive Opinion Survey, a monthly index by the National Retail Federation, consumers seem to be fueling renewed optimism in the corner office as the Retail Sector Performance Index (RSPI) for February rose for the first time after four straight months of decline.
The RSPI measures retail executives' evaluations of a number of key metrics and is based on a scale of 0.0 100.0 with 50.0 equaling normal.
The reading still came up nearly five points short of the year-ago optimistic outlook reflected in the 62.9 reading for February 2004, a month that saw retail sales increase 6.7%, according to the ICSC survey.
The longer term Demand Outlook, which measures the six-month outlook for retail, picked up 220 basis points compared to January but it still lags the improved short-term outlook reflected in the Current Demand index. The year-ago reading of 68.8 helped boost the total RSPI gain last year, but a more cautious group of executives appear to be taking a wait n see attitude this year.
According to the NRF survey, pricing power stabilized in February, with the pricing index rising 15 points to 40.0. Operations, which include Inventory levels and Employment, remained steady at 52.5.
>>> Much of the moderation in the outlook can be expected after the rapid decline seen in most of these metrics last year after a very strong start to the year…
